VADAYAR SERVICE CO-OPERATIVE BANK LTD NO.266 vs. INCOME TAX OFFICER

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WP(C)/34205/2019HC KeralaKLHC01089211201913 December 2019Author: HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR3 pages
AI SummaryRemanded

What did the High Court hold?

The High Court disposed of the writ petition by directing the Income Tax Appellate Tribunal (3rd respondent) to consider and pass orders on the petitioner's appeal (Ext.P4) within an outer time limit of six months. Crucially, the Court ordered that recovery steps pursuant to the rectified order (Ext.P3) for the amounts confirmed against the petitioner shall be kept in abeyance until orders are passed by the Tribunal and communicated to the petitioner. The petitioner is required to furnish a copy of the judgment and the writ petition to the Tribunal. The Court did not decide on the merits of the disallowance of deduction under Section 80P, but rather focused on ensuring a timely disposal of the appeal and staying recovery pending that decision.

What were the facts?

The petitioner, Vadayar Service Co-operative Bank Ltd, has filed a writ petition challenging recovery steps initiated by the respondents for amounts confirmed by a rectified order (Ext.P3). The petitioner had preferred an appeal (Ext.P4) along with a stay petition (Ext.P5) before the Income Tax Appellate Tribunal (3rd respondent). The petitioner contends that recovery actions are being taken even before the stay petition is considered. The core issue in the appeal relates to the disallowance of deduction claimed under Section 80P of the Income Tax Act.

What were the issues?

1. Whether recovery steps can be initiated against the petitioner for amounts confirmed by a rectified order when an appeal and stay petition are pending before the Income Tax Appellate Tribunal? (Question of law and fact, concerning the procedural fairness and the impact of an appeal on recovery proceedings). Assessee's Contention: The petitioner argues that recovery steps are being taken prematurely, even before the stay petition is considered by the Tribunal, despite the pendency of their appeal against the rectified order. The petitioner relies on the principle that recovery should be stayed pending the disposal of an appeal, especially when a stay petition has been filed. Revenue's Contention: The judgment does not record specific arguments made by the revenue. However, the revenue's actions of initiating recovery steps suggest their stance that such actions are permissible despite the pending appeal.

Which sections of the Income-tax Act were involved?

Section 80P

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE A.K.JAYASANKARAN NAMBIAR FRIDAY, THE 13TH DAY OF DECEMBER 2019 / 22ND AGRAHAYANA, 1941 WP(C).No.34205 OF 2019(A) PETITIONER/S: VADAYAR SERVICE CO-OPERATIVE BANK LTD NO.266 VADAYAR P.O., THALAYOLAPARAMBU P.O. KOTAYAM-686605 REPRESENTED BY ITS SECRETARY, P.R.SAJI BY ADVS. SRI.ANIL D. NAIR SRI.R.SREEJITH SHRI.GOKULRAJ L. SMT. ARYA ANIL SMT.SRI HARINI S.P. RESPONDENT/S: 1 INCOME TAX OFFICER, WARD-5 KOTTAYAM-686001 2 THE COMMISSIONER OF INCOME TAX (APPEALS) KOTTAYAM - 686001 3 INCOME TAX APPELLATE TRIBUNAL KOCHI - 682037 REPRESENTED BY ITS REGISTRAR SRI.JOSE JOSEPH, SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 13.12.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No.34205 OF 2019(A) 2

JUDGMENT Against Ext.P3 rectified order under the Income Tax Act, the petitioner has preferred Ext.P4 appeal together with Ext.P5 stay petition before the 3rd respondent. It is the case of the petitioner that even prior to considering the stay petition, recovery steps are taken by the respondents against the petitioner for recovery of the amounts confirmed by Ext.P3 rectified order. It is stated by the learned counsel for the petitioner that the issue involved in the appeal pertains to dis-allowance of deduction claimed under Section 80P of the Income Tax Act.

2.

I have heard the learned counsel appearing for the petitioner and also the learned Standing Counsel appearing for the respondents. On a consideration of the facts and circumstances of the case as also the submissions made across the Bar and taking note of the fact that in similar matters, this Court has directed the Appellate Authority to consider and pass orders in the appeal and stayed the recovery of disputed amounts pending disposal of the appeal, this Writ petition is disposed directing the 3rd respondent to consider and pass orders on Ext.P4 appeal within an outer time limit of six months. Recovery steps pursuant to Ext.P3 order for recovery of amounts confirmed against the petitioner shall be kept in abeyance till such time as orders are passed by the 3rd respondent as directed above and communicated to the petitioner. The petitioner shall produce a copy of this judgment together with a copy of the writ petition before the 3rd respondent for further action. A.K.JAYASANKARAN NAMBIAR JUDGE WP(C).No.34205 OF 2019(A) 3

Appendix — schedule of exhibits
APPENDIX PETITIONER'S EXHIBITS EXT. P1 TRUE COPY OF THE ASSESSMENT ORDER ASSESSMENT ORDER FOR THE A.Y.2011-12 DATED 10.01.2014 EXT P2 COPY OF THE ORDER DATED 28.02.2018 PASSED BY THE 2ND RESPONDENT EXT.P3 COPY OF THE ORDER U/S.154 READ WITH SECTION 250 OF THE ACT DATED 30.09.2019 EXT.P4 COPY OF THE STATUTORY APPEAL FILED BEFORE THE 2ND RESPONDENT FOR THE A.Y.2011-12 EXT.P5 COPY OF THE STAY PETITION FOR THE YEAR 2011-12 FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT EXT.P6 COPY OF THE DEMAND NOTICE DATED FOR A.Y.2011-12 ISSUD BY THE FIRST RESPONDENT sd

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